More than 4 million U.S. workers will become newly eligible for overtime pay under rules issued Wednesday by the Federal Government.
The policy changes are intended to counter an erosion in overtime protections dating back to the 1930s requiring employers to pay 1 1/2 times a worker's regular salary for any work past 40 hours a week. Vice President Joe Biden announced the changes yesterday during a stop in Columbus. Ohio Public Radio's Andy Chow reports.
The downtown Columbus headquarters for Jenis Splendid Ice Creams was packed as Vice President Joe Biden announced new rules that extend the eligibility for workers to get paid overtime.
Biden said hes a fan of Jenis because of the treatment of their employees.
Biden: Jenis understands what the word fair means. A lot of this isnt complicated. We make it sound complicated but its all basically about just being fair.
Heres how the new rules break down. Right now someone making a salary of about $23,000 or more is not required to get paid overtime. But the new rules, which would start in December, would nearly double that threshold. So anyone making about $47,000 or less must be paid overtime if they work more than 40 hours a week.
To Biden, a job is about more than just a paycheck, its about dignity.
Biden: And you deprive your dignity, in my view, when you know youre working much much harder and much much longer than youre getting compensated for.
Democratic U.S. Senator Sherrod Brown says over the next decade, this will put $12 billion into the pocketbooks of employees.
Brown: Theyre not putting that money into a Swiss bank account. Theyre spending that money in a grocery store Ashland, or spending that money in a hardware store in Dublin, or spending that money buying some new clothes for their daughter at Centennial High School.
Ohio labor groups have come out to support the rule change, which will be implemented by the U.S. Department of Labor. Ohio AFL-CIO President Tim Burga said that requiring overtime pay for what would likely be hundreds of thousands of Ohioans would help bridge the gap with the continuing problem of income inequality.
But there are several groups who say these new rules put a stranglehold on business owners.
Walston: This ruling doesnt take into account what restaurants have to deal with.
Thats Natalie Walston with the Ohio Restaurant Association, which represents 22,000 restaurant owners in the state. She says the threshold is way too high, especially for the restaurant business where hours can fluctuate.
Walston: The great thing about working in a restaurant is sometimes you can set your own schedule. If you need extra hours you can always get them, if you need time off you can have somebody else who can come in and take your place.
Roger Geiger is vice president of the National Federation of Independent Business Ohio chapter, representing nearly 25,000 small businesses.
He says these new rules will hurt the employees the Obama Administration wants to help, because as Geiger puts it, business have to find the money somehow.
Geiger: And its gonna come from reduced benefits, its gonna come from taking someone from a managerial position and putting them back into an hourly position with potentially loss of benefits that they may have had as a manager. Its gonna cap the number of hours that they are able to work, somewhere between 35 and 40 hours.
The new rules also give workers the option to take time off instead of getting the time and a half of overtime pay.
The Obama Administration estimates that this will affect more than 4.2 million Americans.